Thursday, May 29, 2014

The Saves and the Save-Nots

The richest 20% of the population in Britain will have, on average, the spare sum of £18,680 to put into their savings this year, while the poorest 20% will spend £1,910 more than they earn, latest figures suggest.
The Post Office said saving was still being driven by the wealthiest people while lower earners were suffering a debt crisis. According to the Centre for Economics and Business Research, which undertook the analysis, this trend has been happening for the past 12 years.

The poorest 40% of the population have spent more than they have earned over this period, in contrast to the top 40% of earners who had money to save every year. Even during the financial crisis of 2007-2008 those in the highest income brackets had enough disposable income to increase the amount they saved annually. By contrast, the rise of payday lenders in Britain's "Wonga economy" symbolised the squeeze on living standards faced by ordinary families.

Despite the economy's "green shoots" the poorest 20% would continue to spend more than they earned, though the researchers forecast that the figure would fall to £1,053 by 2018, based on average incomes and spending patterns. Shelter found that 44% of working families with children under 18 could be one month's salary away from losing their homes if they became unemployed because they had little or no savings. Meanwhile Citizens Advice said it had noted a 16% rise in social housing rent arrears last year, and a big jump in repossession warnings.

The research suggests the gulf between the wealthiest and poorest will continue to grow. This May figures from the Office for National Statistics showed Britain's richest 1% had accumulated as much wealth as the poorest 55% of the population.

From here

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